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Surely the fact everyone's expecting a price cut means making the cut is all the more urgent. People are even less likely to buy a PS3 was the current price now everyone seems to think Sony will have to cut at least $100 off.

Maybe this is keeping demand artificially low too. May mean a $100 cut would have a bigger boost on sales than people expect.

I think sony made a big mistake by promoting the PS2 as a multi-purpose media/computing unit. That got microsoft involved just to protect their PC profits. They're fine losing cash on x-box, as a spoiler for PS dominance of living-room computing, and this could motivate them to keep cutting 360 prices in line with PS3 price drops, regardless of whether that's the profit maximising decision for their 360 division.